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Island Investing

Riffs, rants, and the upside of investing from way off Wall Street


Category: Island Investing

Island Investing: Stock Splits

Q. Why do companies split their stock? A. A stock split is a decision made by a public company to increase the number of shares outstanding by dividing them into multiple shares. In a 2-for-1 stock split, for instance, every stockholder will receive one additional share for each share currently held. Because stock splits are […]

Island Investing: Naked Shorting

Q. What is “naked shorting”? A. As I explained last week, shorting is a way to profit from a decline in the price of a stock. Shortsellers, though often vilified, play an important role in the stock market and were the first to spot the frauds at Enron and WorldCom. It is important to distinguish […]

Island Investing: Shorting

My article in today’s Keys Weekly: Q. What does it mean to “short” a stock? A. Buying stock in anticipation of it going up, the way most people traditionally think about investing, is considered “going long.” Shorting is a way to profit from the decline in a stock’s price. Here’s an example. For several years, […]

Island Investing: Inflation

From my column in today’s Keys Weekly. Also, Key West editor Josie Koler is now on Twitter, too. She’s @josiekwweekly. Q. How concerned should I be about inflation? A. Be concerned, but don’t panic yet. Inflation is an increase in the general level of prices of goods and services. When the level of prices rises, […]

Island Investing: Bank Failures

My column in today’s Keys Weekly: Q. What exactly is causing all these banks to fail? A. Let’s review the business model of a bank. If you have a checking account or a car loan, you probably already know the basics. A bank takes in money from one group of people, depositors, lends it to […]

Island Investing: Book Recommendations

Q. What books would you recommend to help learn about investing? A. I’ve previously mentioned three books that are great for new investors. Those were The Little Book That Beats the Market by Joel Greenblatt, The Little Book That Builds Wealth by Pat Dorsey, and One Up On Wall Street by Peter Lynch. Here are […]

Island Investing: More on Intrinsic Value

From today’s KeysWeekly, more nuggets of investing goodness, 350 words at a time: Q. Can you explain the concept of “intrinsic value”? A. Would you rather receive $100 today, or $100 a year from now? Most people would take the money today. After all, if you took the $100 in cash now, invested it in […]

Island Investing: Moats

Island Investing Cale Smith, MBA August 5, 2009 Keys Weekly Q. What is a “moat”? A. Some businesses are better than others. That simple truth can be hard to remember, especially if you’re rushing to invest in the market out of fear that you’ll miss the latest rally. Keep in mind that what makes a […]

Island Investing: What To Look For

Island Investing Cale Smith, MBA August 29, 2009 Q. What should I be looking for when I invest in stocks? A. I’ll continue my answer to last week’s question with a quote from the world’s greatest investor, Warren Buffett: “What an investor needs is the ability to correctly evaluate selected businesses. Note that word […]

Island Investing: What Not To Do

Island Investing Cale Smith, MBA August 21, 2009 Q. What should I be looking for when I invest in stocks? A. Let’s tackle this question in two parts. But first, a warning. Wall Street for all its flaws does employ some very bright people. Before you buy a stock, ask yourself if you really […]